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Hungarian Forint Rises as Central Bank Ends Interest Rate Cut Cycle

July 23, 2014 at 17:15 by Vladimir Vyun

Many Hungarian 20,000-forint billsThe Hungarian forint advanced today after yesterday’s monetary policy meeting of the nation’s central bank. While the bank cut its main interest rate more than was expected, it also announced an end to the longest cycle of interest rate cuts in Europe.

The Magyar Nemzeti Bank cut its key central bank base rate by 20 basis points to 2.1 percent, reducing borrowing costs for the 24th consecutive month. At the same time, the central bank said that “the pace of economic activity is strengthening” and “Hungarian economic growth is likely to continue”. As a result, the MNB announced:

The Council judges that the central bank base rate has reached a level which ensures the medium-term achievement of price stability and a corresponding degree of support for the economy. That means that the two-year easing cycle of a significant cumulative reduction of 490 basis points has ended.

USD/HUF fell 0.16 percent to 228.23 as of 17:15 GMT today.

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